I totally agree with your last point, and I wish more university acknowledged this when deciding who teaches classes. My favourite CS course was taught by a first year MS student. For most universities though, letting an undergraduate teach a class is a no-no and it surprises me that Stanford, one of the most prestigious university in the world, would make an exception to that.

Edit: Commenter above clarified to me that the student is not teaching a full blown 3 unit course.